FAST FIVE: COVID Relief Showers States With 600% Of Lost Tax Revs, Turning Rescue Into Stimulus
The magnitude of the shortfalls also reflects the unusually uneven nature of the recession: While lower paid service industry employees were thrown out of work, the highest earners who pay far more in state taxes were less affected because they were able to work from home.
California, a state that's heavily dependent on income-tax revenue from the highest earners, is seeing revenue collections run about 10% more than was anticipated in the budget for the fiscal year that will end in June.
The toll may also be understated due to shifted tax deadlines, inflating revenue collections in various states.
In total, the stimulus will allocate $350 billion to states and local governments struggling to operate amid sharply lowered tax forecasts. Republicans, particularly former President Donald Trump, have repeatedly called the carve-outs a “bailout” for poorly run Democratic strongholds.
Even Mitt Romney (R-INO) called Biden's plan “wasteful and harmful,” while moderate Democrats in the Senate are looking at potential cuts to state and local aid as they attempt to streamline the package.